IRVING, TX-The highest bidder in a field of 10 has pocketed the deed to the 226-unit Willows Apartments for $5.9 million. The Encino, CA investment group is starting out the play at a 9% cap on the actual numbers.

“These guys saw the opportunity and jumped on it,” John Barker, senior associate and national director for Marcus & Millichap Real Estate Investment Brokerage Co. in Dallas, tells “It was over $50 per sf so it was pretty aggressive.” The just-pocketed deed is a 98%-leased asset at 3304 Willow Creek Dr., right at the geographical epicenter of the current sales cycle and right in line with the dynamics of today’s hot tickets.

Barker says the investment group’s letter of intent with upfront earnest money and short inspection period were the decisionmakers for the seller, Mission Center Road LLC of Los Angeles. Dallas-based BMC Capital LP vice president Steve Sieling arranged 80% loan-to-value financing with Imperial Bank in Los Angeles, getting five-year, fixed-rate terms on a 30-year amortization schedule. “Full leverage with a step-down prepay schedule was very important to these investors,” he says, citing the property’s concessions were a stickling point for lenders.

The seller had bought Willows Apartments out of foreclosure in 2004, renovated it last year, re-tenanted and brought it back to market. The plan is to trade up to a class B asset, according to Barker.

The Willows, built in 1963, sits on a seven-acre tract with visibility from US Highway 183 and seven miles from Dallas/Fort Worth International Airport. Barker says the new owner’s plan, which included retaining Encore Management Co. of Dallas to lease and manage, is to let concessions burn off and bump rents. The lion’s share of the monthly rent is $515 per unit while the other apartments bring in $625 and $750. The complex has 224 one-bedroom apartments, all 541 sf. There is one unit each, with 1,082 sf, in two- and three-bedroom floor plans.

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